Tue, 06 Dec 2022

NEW YORK, New York - Credit concerns weighed on U.S. markets on Monday, sending the major indices lower and the U.S. dollar higher.

"Higher interest rates will cause financing conditions to deteriorate and will weaken liquidity and credit quality," Moody's credit rating agency said Monday. "This could compel many companies to focus on cash conservation by curtailing shareholder returns and debt-funded M&A."

"Sectors reliant on discretionary demand will be hit hardest," Moody's said, adding, "The conflict between Russia and Ukraine remains a key geopolitical risk."

Technology stocks did the worst. The Nasdaq Composite tumbled 121.55 points or 1.29 percent to 11,024.51.

The Dow Jones industrials dropped 45.41 points or 0.13 percent to 33,700.28.

The Standard and Poor's 500 fell 15.40 points or 0.30 percent to 3,949,94.

The U.S. dollar rebounded Monday, with the euro plummeting to 1.0244 by the New York close. The British pound sank to 1.1822. The Japanese yen tumbled to 1.4204. The Swiss franc weakened to 0.9588.

The Canadian dollar was soft at 1.3452. The Australian dollar dropped a cent to 0.6604. The New Zealand dollar was out of favor at 0.6101.

On overseas equity markets, the FTSE 100 in London declined 0.12 percent. The Paris-based CAC 40 was off 0.15 percent. Germany's Dax fell 0.36 percent.

The Australian All Ordinaries slumped 19.60 points or 0.27 percent to 7,335.10.

South Korea's Kospi Composite dived 29.49 points or 1.21 percent to 2,414.99.

China's Shanghai Composite retreated 12.30 points or 0.39 percent to 3,085.04.

The Hang Seng in Hong Kong shed 336.63 points or 1.87 percent to 17,655.91.

Going against the trend in New Zealand, the S&P/NZX 50 advanced 59.79 points or 0.53 percent to 11,040.40. "Many borrowers have yet to feel the impact of higher interest rates. That will change a great deal over the next 6 to twelve months as they come due for refixing," Westpac's Acting Chief Economist in New Zealand, Michael Gordon, said Monday. "Consequently, we expect to see a softening in consumer spending and the demand for workers over the next year or so, with growth effectively stalling by 2024," he added.

In Japan, the Nikkei 225 also gained ground, adding 45.02 points or 0.16 percent t to 27,944.79.

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